Scor will buy Generali U.S. Holdings Inc. for cash, and
also pay an “earnings adjustment,” the Paris-based company
said in a statement today. The company, which may issue debt to
finance the acquisition, will book a gain of at least 100
million euros ($131 million) when the deal closes, it said in a
presentation.

Scor is leapfrogging Zurich-based Swiss Re (SREN) and
Chesterfield, Missouri-based Reinsurance Group of America Inc. (RGA)
to become the largest life reinsurer in the U.S. The company
will have a market share of more than 25 percent, based on
Munich Re’s preliminary 2012 survey for the Society of
Actuaries, Scor said. The French company in 2011 expanded in the
U.S. by buying mortality-risk businesses from Aegon NV’s
Transamerica Re unit.

“The seller’s decision created an opportunity,” Scor
Chief Executive Officer Denis Kessler said on a call with
journalists today. By buying Generali (G)’s business, Scor will have
an “extremely satisfying position” in the U.S. life
reinsurance market and is not seeking more purchases, he said.

Scor climbed 3 percent to 22.94 euros by 2:39 p.m. in Paris
trading, giving it a market capitalization of 4.4 billion euros.
Generali rose 1.4 percent to 14.54 euros in Milan, valuing the
company at about 22.6 billion euros.

Increasing Capital

Generali, led by CEO Mario Greco, is seeking to boost
profit and increase capital by disposing of certain assets,
cutting costs and focusing on faster-growing emerging markets.
The Trieste, Italy-based company, which set a goal of 4 billion
euros in revenue from asset sales by 2015, is also selling Swiss
asset-management unit BSI Group.

“We continue to make steady progress in our strategy of
disposing of non-core assets and strengthening the group’s
capital position,” Greco, 53, said in a separate statement.

The Italian insurer said it expects proceeds from the sale
of $920 million, including the $750 million purchase price, $30
million of estimated profit and $140 million of released
collateral, it said. The company will book a $150 million
capital gain, boosting its Solvency I ratio by about one
percentage point.

Scor Expansion

The acquisition is “very positive” for Scor, Michael Huttner, a London-based analyst JPMorgan Chase & Co. with a
neutral rating on the stock, said in a note to investors.

Citigroup Inc. and Mediobanca SpA advised Generali on the
transaction, while BNP Paribas SA and Deutsche Bank AG advised
Scor, according to statements from both companies.

The French reinsurer, led byKessler, 61, is targeting
total 2013 premiums of more than 10 billion euros, compared with
9.51 billion euros last year, it said last month. Generali’s
U.S. life-reinsurance business represented premiums of $925
million last year. Scor expects to complete the deal in the
second half, according to its presentation today.

Generali’s U.S. life-reinsurance business, which has about
120 employees, is run as an autonomous business from its
European parent, helping smooth the planned combination with
Scor’s existing U.S. franchise, the French company said.
Generali said that it will continue to operate in the U.S.
property-and-casualty market through its New York branch.

Reinsurers help insurers shoulder risk, earning premiums
that they can invest to make a profit. Generali’s U.S. life-reinsurance business last year had about $64 billion in U.S.
recurring new business, ranking No. 4, Scor said, according to
Munich Re’s preliminary data. Scor was No. 3 in 2012, with $77
billion in new business, it said.